FRBuyer: Wegmans – Shoppers Love It; Many Vendors Don’t
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.
Wegmans is one of my favorite stores on the planet. But more than a few in the vendor community — both private label and branded — are not fond of them. They say that as an account, Wegmans is high-maintenance, too wedded to an overgrown private label program and sometimes just plain arrogant. As one vendor put it, "It’s a sensational supermarket, but a very frustrating account. They only carry national brands when they feel they have to — the Wegmans brand means everything to them."
And that was a relatively mild critic, obviously from the branded side, although I spoke with private label vendors also.
"Wegmans is an enigma, what I would call Traders Joe’s on steroids," added another branded vendor. "It is the best shopping experience for the consumer and one of the most difficult accounts to do business with as a national manufacturer. They put full support behind their private label and eliminate as much direct competition to their PL items as possible. I believe they have a model that works for them as long as national manufacturers continue to entice the consumer to try new products or new uses for current items."
The vendor noted that Wegmans offers its brand at a 10 – 20 percent discount to capture the consumer and "I believe they have as much as 50 percent private label in many categories."
The source added, "The one thing that disappoints me as a sales manager is their lack of respect for what we do to build our brand and the awareness of a category which gains them their consumers. The buying staff continues to compare their PL cost to ours and tells us we are ‘overpriced,’ even threatening to discontinue SKUs or refusing new product offers that compete with their PL. It’s all strong-arming to get manufacturers to strengthen their trade offers."
Another Wegmans vendor says that while other retailers are continually relying on the slotting dollars of new items as a revenue stream. Wegmans is willing to sacrifice slotting revenue in order to create more space in their sets for Wegmans brand products. He adds that Wegmans tends to try and dictate programs to the vendors, continually challenging them about other hi-lo retailers and their promotional price points despite the fact that Wegmans claims to be an EDLP operator.
Does Wegmans apparently adversarial relationships with many national brands hold any risks for the chain? How important are national brands to Wegmans’ shopping experience?